Bitcoin's Rollercoaster: Citigroup and Nomura's Impact
Bitcoin's price had a turbulent week, rising by 0.77% from September 15 to September 22, settling at US$26,647. This comes as Bitcoin continues to trade below the crucial US$30,000 threshold since August 9. Simultaneously, Ether, the world's second-largest cryptocurrency, experienced a 1.48% decline, dropping to US$1,598 during the same week.
In a notable development, Citigroup, one of the largest banking institutions in the U.S., unveiled Citi Token Services, a blockchain-based cross-border payments solution for institutional clients. This platform aims to employ tokenized deposits and smart contracts to facilitate real-time cross-border settlements and boost liquidity for institutional clients globally.
Meanwhile, Nomura, Japan's largest investment bank, launched the Bitcoin Adoption Fund for institutional investors through its subsidiary, Laser Digital Asset Management. With a massive US$500 billion in assets, Nomura anticipates this fund to be the first of many digital asset investment solutions offered by the financial giant.
Experts believe Nomura's Bitcoin Adoption Fund could attract substantial capital inflows into the cryptocurrency market by year-end. However, its immediate impact on price charts remains uncertain, as Bitcoin's price movements are influenced by a multitude of factors.
Following Nomura's announcement, Bitcoin briefly surged to a weekly high of US$27,475 but ultimately fell below the US$27,000 support level, indicating considerable resistance. Analysts suggest that continued rejection at this level could eventually lead to a breakthrough, but the long-term outlook for Bitcoin remains bearish.
Bitcoin achieved a significant milestone by surpassing Visa's annual transaction volume, underscoring its growing dominance in the financial sector. As more individuals and institutions recognize its potential, the demand for Bitcoin is expected to rise, potentially leading to increased liquidity and higher valuations for the cryptocurrency.
On a different note, the bankruptcy of crypto exchange FTX received court approval to liquidate its crypto holdings valued at approximately US$3.4 billion. This development could exert additional selling pressure on the crypto market, particularly for assets like Solana, Bitcoin, and Ether held by the exchange. The extent of these implications depends on various factors, including market conditions and investor sentiment.
Despite the potential impact of FTX's liquidation, experts believe the market will absorb most of the sell pressure, minimizing adverse effects on Bitcoin's US$518 billion market capitalization. However, it may introduce an element of uncertainty.
In the macroeconomy, the U.S. Federal Reserve chose to maintain its benchmark borrowing rate but signaled the likelihood of another interest rate increase before year-end. This announcement led to a drop in major U.S. stock futures, marking a challenging start to the week for the stock market.
Notable movers in the crypto space include ImmutableX's IMX token, which experienced a 33.8% gain, and Toncoin, with a 17.37% increase. ImmutableX NFT platform's native token, IMX, attracted significant interest, while Toncoin's rally followed its partnership announcement with Telegram.
Looking ahead, Bitcoin faces resistance at the US$27,000 level, with potential for a breakout to US$28,800 if this barrier is breached. However, the cryptocurrency's price action remains influenced by broader economic concerns, making it vulnerable to macroeconomic crises and market sell-offs.
Investors eagerly anticipate U.S. Federal Reserve Chair Jerome Powell's Thursday speech, where he will engage with educators in Washington D.C., providing insights into future economic policies and their potential impact on the financial landscape.